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Covenant, Community, and the Common Good: Norms for Corporate Leadership and Culture

Eric Mount

04/01/2007

[1] It is far from apparent that covenant, community, and common good are ideas whose time has come. [1] Recent scandals in corporate life have sent many companies back to the drawing board concerning their corporate cultures, and some critical observers regard the apprehended executives as only the tip of the iceberg-the larger ice being a pervasive determination to get as much as you can, for as long as you can, any way that you can.[2] More sweeping still is the set of developments described by former secretary of labor Robert Reich in The Future of Success: Working and Living in the New Economy. On the global corporate scene, he sees "the obsolescence of loyalty," "the end of employment as we knew it," "the community as commodity," and "leadership as courtship." When institutional bonds were stronger and the intensity of competition was tamer, he believes that there was an "implicit social compact" with workers and communities. Now being socially responsible is often reduced to a potential strategy to help the bottom line, and "the 'glue' that holds an enterprise together is little more than a bunch of temporary contracts."[3] Contracts, we shall argue, do not equate to covenants or to social compacts.

[2] The norms proposed here for recovery also run counter to a prevailing current in our society that has been with us for decades. Laments about damaging effects of American individualism (in its utilitarian and expressive forms) on our sense of community have continued to mount since Robert Bellah and his four colleagues gave us Habits of the Heart and The Good Society (about American culture and institutions respectively).[4] Common good language has likewise been in trouble. Utilitarian individualists have argued that the common good will take care of itself if all of us pursue our economic interests. (There comes to mind British bishop Charles Gore's description of laissez-faire capitalism: "'Each for himself, and God for us all,' said the elephant as he danced among the chickens.")[5] Expressive individualists, focused on their own self-actualization and suspicious of any institutional limits, have valued community and institutional loyalty only so long as the emotional pay-off was better than alternative possibilities offered. What Martin Marty calls "totalists" make us gun-shy by their eagerness to define the common good for the rest of us, and what he calls "tribalists" discourage searches for the common good with their insistence that our pervasive pluralism of groups and individuals makes such a quest hopeless.[6]

[3] Still another discouraging word comes from those ethicists who cite the questionable uses of institutional loyalty and covenantal obligations by corporations in the past. On the one hand, there is the unequal vulnerability of the parties to explicit or implicit covenants. In situations where all of the power resides in ownership and management that can "fire at will," exploitation may occur under the cover of language lauding loyalty and teamwork.[7] It is also true that we are seeing "talent wars" in which highly qualified professionals are hardly helpless. They can and do "leave at will" for a better offer with no pangs of loyalty to their employers. Furthermore, there is the problem of work addiction in both individuals and the addictive organizations that cultivate and exacerbate this malaise.[8] Wall-to-wall work can take a devastating toll as people truly lose themselves in their over-driven vocational pursuits.

[4] If our three proposed norms from the Christian tradition have been suffering from both neglect and abuse, Christian ethicists may be moved to redouble their efforts to re-establish their relevance in the business sphere of public life. Or they may be further confirmed in their suspicion about such efforts. Some may argue that these norms should inform the life of Christian communities, but that their religious roots make them workable in business enterprises only in explicitly Christian companies. In the dog-eat-dog world of corporate competition, we should not expect corporate moral development; but we can hope that market forces will yield maximal personal benefits for consumers and investors. Others, in turn, may speak to the dilemma of straddling the realms of Christian discipleship and corporate culture by disabusing us of utopian ideas about bringing corporate domains into closer proximity to the Kingdom of God and offering coping skills for negotiating the questionable demands of corporate institutional life. Both cautions are telling, but not wholly convincing. Jesus' admonition to be salt and light in world will continue to prompt efforts at systemic societal reform as well as endeavors to set a personal or ecclesial moral example. Furthermore, religious communities, along with schools and other educational settings (including corporations), should be equipping people for moral discourse and leadership in the workplace.

[5] Such efforts can recall norms from the Christian tradition that have or can gain currency in the deliberations of corporate as well as political life. Differing spheres of life may have covenantal expectations and obligations peculiar to them that can be informed by our religious traditions without being subsumed under religious direction. In addition, such consulting organizations as the Global Ethics Institute and the Corporate Leadership Council and such corporations as those cited by Fortune magazine as "The 100 Best Companies To Work For" (reflecting a survey of over 100,000 workers) may be using normative language and guidelines that can find common ground in this endeavor.[9] (We should note that many of the companies lauded by Fortune are situated and focused in such a way-in child care and health care for examples-as to be less burdened by the pressures of globalization than Reich finds typical in "the new economy.")

Corporate Mission and Purpose[6] One way to make corporations socially responsible and contributory to the common good of a local, national, or global society is through the exercise of what some would call government's covenantal obligations to regulate. When mammoth global corporations dwarf most governments, this disciplinary role has become more and more elusive, if not impossible, without major (and often strongly resisted) changes in regional and international governmental mechanisms. At best, however, the outer limits imposed by regulation and legislation cannot transform a corporate culture that merely complies rather than converts to a culture of conscientious commitment to the common good of both the company and the larger society. Mere compliance with external regulation is only contractual; a culture of conscientious commitment is potentially covenantal and complementary to a larger public good.

[7] In search of what our three norms have to offer, we can start with "the vision thing." Mission statements are de rigueur in most institutions. Writing them forces consideration of corporate purpose. Why are corporations chartered, licensed, aided with tax breaks, expenditures on infrastructure, and educational opportunities for a work force, and afforded special legal protections? They are supposedly thus supported because their goods and services contribute to the common good. It is understood that they must do well to survive, but they should above all do good for their employees and for other stakeholders in the larger community and for the natural environment. Management guru of a half-century ago, Peter Drucker, states in The Practice of Management, "What is good for business-even all businesses-is irrelevant. . . . It is management's public responsibility to make whatever is genuinely in the public good become the enterprise's own self-interest."[10] A business is an organ of society; and if its mission does not include the common good, it has already betrayed the implicit or explicit public trust. And workers acting from more than a lack of employment choice are most likely to commit to an employer that espouses shared values-usually values that stretch one's vision beyond the narrow interests of the individual employee or employer. In numerous companies cited in Fortune's"100 Best" in 2006, for example, "the noble cause" carries great weight in employee satisfaction and devotion. Granted that the common good can be like the proverbial greased pig, even in the Christian ethics literature, contribution to the general welfare and shared values is what motivates commitment at the deepest level.

[8] When we look at the list of benefits that corporations and individual professionals working in them receive that enable them to "do business," we have moved into covenantal territory. William F. May's writing on professional ethics posits that covenants are predicated on gifts, and they are carried by a grateful sense of indebtedness.[11] Professional educations received, educated labor pools provided, founders' vision risked, investors' and customers' trust continued, co-workers' effort multiplied by collaboration, tax incentives and police protection afforded, and community services made available do not exhaust the list of reasons for saying that corporations should feel indebted and be public-spirited. Institutions as well as individuals should have a sense of calling that can be articulated in terms of covenant and common good. Visionary moral leadership will draw those connections.

Community Measures and Obligations[9] Covenants are as communitarian as contracts are individualistic. In covenant communities, all the members have a covenant of mutual trust and responsibility with every other member for the long haul, but in contracts the parties have minimal agreements with term limits that are characterized as much by escape clauses as by staying power. Contracts are often necessary to protect personal and group rights and interests, but they do not transform lives by their expectations and support. It takes a community to have a covenant, and it also takes a community to have a common good-or a continuing dialogue about a common good that is more than an imposition from above. If a corporation is the antithesis of community, the bucks stop us here. However, if, as Alan Wolfe among others has claimed, the workplace is for many the place where people have the best possibility of experiencing or building community in our individualistic society, we need to unpack the implications of community as a normative principle.[12]

[10] Jewish theologian Martin Buber is among those who have reminded us that a community needs more than "having feelings for one another," although it involves those feelings. It requires a shared relation to a living Center and "living mutual relation with one another."[13] As Buber did, Christians would make God their ultimate center. We cannot ask corporations to espouse that center as a requirement for membership; in fact we would worry if they did. However, we can ask that they not make a god of the company and that they center on values that point beyond the good of the company alone to the good of a larger, even global and ecological, community. These centering values are what should give a corporate culture its integrity. If the company's values call for a constricted integrity that encompasses no larger good than that of the company, twin dangers loom. There is the tunnel vision the\ay makes company values rule every part of one's life, and there is also the compartmentalization to which we may retreat lest cherished values from other spheres of life be abandoned. The first loses integrity by splitting company good from the public good; the second loses integrity by splitting the self among its competing and conflicting allegiances.

[11] Beyond the issue of centering values, Herman Daly and John B. Cobb Jr. provide four other characteristics or measures that distinguish a community from a society, no matter the size of the collection of people. (1) Membership in the society must contribute to the self-identity of the person, but not necessarily totally define it. (2) Members should participate extensively in the decisions that direct the community's life. (3) The whole society or community assumes responsibility for the entire membership. (4) The diverse individuality of each member is respected.[14] Each of these can be seen as an implication of neighbor love, and has important normative implications for the leadership and life of corporations.

[12] On the negative side of the identity criterion, it is crucial that one's entire identity not be defined by one's gainful employment. A 1998 survey of a thousand companies by the Family and Work Institute found growing lip service to family-friendliness but much room for improvement in policies and practices to demonstrate such friendliness.[15] Meanwhile concern about the home/work bind was assuming a level of concern among men approaching that of women. If we are dealing with possibly competing covenants, we have obligations to both work and family that cannot simply be sub-contracted to someone else. How can corporations, which have in general been consuming growing portions of employees' time, help employees avoid letting their jobs virtually absorb their entire lives? A review of Fortune's "100 Best Places to Work" for 2006 and 2007 (based on surveys finished by 466 and 446 companies respectively) reveals that more than lip service is happening. There are frequent references to flexible schedules (used by 95% of the employees in one company), family-friendly shifts (9 to 2), compressed work weeks, telecommuting, paid parental leaves, and child care benefits. In at least some cases, companies are recognizing and honoring family covenants.

[13] On the positive side, what wins the commitment that truly identifies with the mission of a workplace? Business surveys suggest that feeling valued by the organization is perhaps the top determinant of this identification, but being committed to what the corporation stands for is of critical importance too. The Corporate Leadership Council's Engagement Survey measured engagement in terms of "connection, contribution, and credibility," particularly as facilitated by able management. Important "connections" are those between company strategies and one's work, one's work and organizational goals, one's work and the company's long-term vision. "Contribution" concerns how one's job's importance is communicated, what one's job expectations are, how much diversity is valued, how one's potential is determined and developed, and how much job freedom is provided. "Credibility" revolves around the ethical integrity of the management, the organization's reputation, the management's acceptance of accountability, management's receptivity to bad news and ability to handle crises, and management's trust in, appreciation of, and inspiration of employees. In short, the "engaged" member of the workplace community will identify with it.[16] Gallup made similar findings through in-depth interviews with 80,000 managers in over 400 companies. Job expectations, job fit, job recognition, being valued and respected and cared about as a person, the mission of the company, and opportunities for growth are crucial determinants. And there was another: "Do I have a best friend at work?" [17] Engagement heightens commitment and identification. It definitely has covenantal connotations. Because of this identification, people tend to stay around and to be productive. In the roll call of Fortune's 100, there are notable references to the percentage of employees with fifteen or twenty years of service. One respondent likened his fellow workers to "a group of old friends who look after each other."

[14] Engagement has a close affinity to the second criterion-participation. Who participates in the development of the company's mission statement and its code of conduct? Who is consulted in important decision-making? How much transparency is there about the financial condition of the enterprise to employees and board members? How open is communication? How much effort is made to hear the voices of all the stakeholders in the company's future? If, as Robert Reich observes, life in today's enterprises is characterized by contractual "shifting participation in limited projects,"[18] how is the corporation's culture promoting broader participation in longer-term projects? How is the larger community taken into account? The environment? Future generations? Who gets to the table, and who speaks for those who are not and maybe cannot be there? These are questions of love, justice, and honesty. Again, a check of Fortune's favored list is revealing: broad inclusion as shareholders, sharing of all news (good and bad) with employees, hotlines, on-line Q and A possibilities, town hall sessions, and breakfast with management are among the avenues of participation.

[15] Responsibility, the third community criterion, flows both ways and connects every member to every other member. It sounds like love in action. The more leadership opportunity a person is given, the more exercise of responsibility on behalf of other members should be obliged. At the same time, able leadership will find ways to evoke greater assumption of responsibility on the part of employees and other stakeholders. Public responsibility should stretch the reach of care beyond stockholders and persons on the pay roll to other stakeholders, even to the ecosystem. As already mentioned, engagement is won in part by a sense that one's personal and professional development matters to the corporation. Sometimes the language used is that of "empowerment." Even if neither party assumes that life-time employment is assured, both parties care about the betterment of each because of the relationship. How are members of the community helped to "be all that they can be"? Does the employee grow during her/his time in the company or division so that her/his readiness and promise for future positions are enhanced? Has the institutional culture been elevated or lowered in quality by one's stay in it? Is the corporation in the development-of-people business as well as the development-of-products business? Again, the Fortune list is revealing: provision of prep classes for graduate study, being trusted by management to do a good job without surveillance, insuring against dead-end jobs, development programs, and paid volunteer time were among the mentions.

[16] One of the observations and criticisms about today's corporations is that they have been making increasing use of part-time workers and temporary workers to avoid conferring the benefits of full membership on their "associates" or "partners." It turns out that even among the companies on the Fortune's honored roll there is a trend away from pension and health care benefits for all employees. A response of some corporate defenders is that shortages of highly skilled workers and extended stays of older workers in the workforce contribute to this pattern. It is nevertheless also true that a few of Fortune's 100 do provide full benefits to part-timers or offer them stock options.

[17] Respect for diverse individuality is the fourth quality of a community. True community is the antidote for poisonous strains of individualism, and it is the garden plot for the cultivation of individuality. Structural strait jackets and lock-step definitions of loyalty are hazardous to the health of institutions as well as their inhabitants. Respect for diverse individuality is evidenced by the level of effort a company makes in recruiting diversity. Where does a company recruit? Whom does it choose to assist in getting further preparation? What mentoring is provided? What flexibility is allowed in work scheduling to accommodate parental and other family responsibilities? Once diversity is enriched in the work force or the management team, how much space is allowed for individual innovation, creativity, and effect on the prevailing culture of the company? Again the "best places to work" are often very attentive to more than token diversity.

Personal and Institutional Virtue[18] So far, the norms of covenant, community, and common good have been articulated in terms of ends or purposes and of obligations and principles. An ethic of virtue or character is equally important, if not more so. Michael Maccoby made an observation decades ago that remains accurate: "Any organization of work-industrial, service, blue or white collar-can be described as a psychostructure that selects and molds character."[19] We might add that a corporate culture not only encourages or discourages certain virtues or traits of character; its psychostructure and social systems embody and facilitate particular institutional virtues and vices. Contractual arrangements for personal or group gain often effect little change in the character of the parties involved. By contrast, the giving and receiving of gifts and promises in covenanted communities with a shared vision of the common good make a difference in members' lives. As William F. May elaborates, transactional (contractual) leadership takes the wishes and interests of one's constituents or employees at face value and attempts to negotiate settlements or ways of getting along. Transformational (covenantal) leadership, on the other hand, stretches vision and enables change through shared commitments to a common good or core values that transcend narrow personal or group interest.[20] Participation in the established practices of a culture of caring and integrity and responsibility can edify us-maybe in spite of ourselves. When people truly care about each other in a company that feels like a family, it makes a difference.

[19] When Rushworth Kidder of the Institute for Global Ethics lists three ethical principles, he includes care-based with ends-based and rule-based approaches.[21] This threesome correlates with the standard delineation of teleological, deontological, and virtue ethics, as well as with H. Richard Niebuhr's ethics of the good, the right, and the fitting or responsibility.[22] This third approach to ethics focuses on the sort of person one is rather than the good one seeks or the rights and rules one observes. At issue then are the qualities of character that are cultivated, encouraged, and supported in the cultures of our communities. Norms such as justice or honesty can be articulated either as standards to follow or qualities to embody. Such virtues as trust, love, loyalty, justice, honesty, care, mutual respect, social vision, and public-spiritedness characterize covenanted communities; and all of these virtues can have institutional as well as individual expressions. They should be embodied and nurtured by policies, codes, structures and cultural environments in organizational life.

[20] Why, one might ask, should corporations seek to serve the common good and to be covenanted communities? One repeated answer is that profitability will be enhanced. If employees feel valued, they are more apt to stay around, be engaged, and be productive. A 2004 Employee Engagement Framework and Survey showed Fortune's "best companies to work for" decidedly outstripping Standard and Poor's 500 companies at one, three, five, and ten year intervals in stock performance.[23] It is then possible that the bottom line will not be damaged and may even be enhanced by the kind of vision and culture we are advocating, but there is no guarantee. There have certainly been instances where acts of corporate responsibility (such as recalling products that had been tampered with in dangerous ways or slashing prices of pharmaceutical products for poor populations) have been very costly, at least in the short term. Further, it might be hard to convince investors that some family-friendly moves will not lessen their returns. We also have to concede that half of Fortune's praised 100 in 2007 are non-public (not for profit or privately owned). Some vision that looks beyond increased profitability is needed to move corporate cultures in the directions we have suggested. Those who lead corporations as managers, board members, consultants and engaged employees need to be committed to a normative core comparable to the one articulated here in terms of covenant, community, and the common good if corporate cultures are to be elevated and transformed. Sharing a culture of covenantal integrity, engagement, and concern for the common good will evoke levels of loyalty and satisfaction that the best salary and benefits package alone cannot deliver. That's where visionary moral leadership comes in.

My own efforts to elaborate these three norms are found in Eric Mount, Jr., Covenant, Community, and the Common Good: An Interpretation of Christian Ethics (Cleveland: Pilgrim Press, 1999) and my article entitled "It Takes a Community-or at Least an Association," In Search of the Common Good, ed. Patrick D. Miller and Dennis P. McCann (New York: t & t clark, 2005), 170-189.

The Institute for Global Ethics links are www.globalethics.org and ethics@globalethics.org The link for the Corporate Leadership Council is www.corporateleadershipcouncil.com. Articles about the Fortune "100 Best Companies to Work For" in 2006 and 2007 are: Geoffrey Colvin, "The Best Places to Work" and Robert Levering and Milton Moskowitz "The 2006 List" Fortune 153, no. 1 (23 January 2006): 71-77, 89-113; Adam Lashinsky , "Search and Enjoy" and Robert Levering and Milton Moskowitz, "The 2007 List," Fortune 155, no. 1 (22 January 22 2007): 70-82, 94-116.

William F. May, The Beleaguered Ruler: The Public Obligation of the Professional (Louisville: Westminster John Knox Press, 2001), 22, 139. Some of May's discussions of the virtue of public spiritedness are also found in this volume. The Physician's Covenant: Images of the Healer in Medical Ethics (Philadelphia: Westminster Press, 1983), second edition (Louisville: Westminster John Knox Press, 2000), is good place to find his earlier, fuller discussion of covenant in relation to gift and indebtedness. He also introduces the idea of covenanted institutional virtue there in chapter 6, an idea that will surface later in this article and that is treated more fully in my Professional Ethics in Context: Institutions, Images and Empathy (Louisville, Ky.: Westminster/John Knox Press, 1990), 65-69.

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